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IC 8895 



Bureau of Mines Information Circular/1982 



OCT 1 4 198? 

.COPY 



SSElcifT* 



«&} 



Chromium Availability— Domestic 



A Minerals Availability System Appraisal 



By Jim F. Lemons, Jr., Edward H. Boyle, Jr., 
and Catherine C. Kilgore 




UNITED STATES DEPARTMENT OF THE INTERIOR 



Information Circular 8895 



Chromium Availability— Domestic 



A Minerals Availability System Appraisal 



By Jim F. Lemons, Jr., Edward H. Boyle, Jr., 
and Catherine C. Kilgore 




UNITED STATES DEPARTMENT OF THE INTERIOR 
James G. Watt, Secretary 

BUREAU OF MINES 
Robert C. Horton, Director 



As the Nation's principal conservation agency, the Department of the 
Interior has responsibility for most of our nationally owned public lands 
and natural resources. This includes fostering the wisest use of our land 
and water resources, protecting our fish and wildlife, preserving the 
environmental and cultural values of our national parks and historical 
places, and providing for the enjoyment of life through outdoor recreation. 
The Department assesses our energy and mineral resources and works to 
assure that their development is in the best interests of all our people. The 
Department also has a major responsibility for American Indian reserva- 
tion communities and for people who live in island territories under U.S. 
administration. _,. i 



Ai4 



ftO 



,*MS 



This publication has been cataloged as follows: 



Library of Congress Cataloging in Publication Data 

Lemons, Jim F. 

Chromium availability — domestic 

(Information circular; 8895) 
Bibliography: p. 11 
Supt. of Docs, no.: I 28.27: 

1. Chromium ores— United States. 2. Chromiun. I. Boyle, Edward H. II. Kilgore. C. C. 
(Catherine C). III. Title. IV. Series: Information circular (United States. Bureau of Mines): 8895 

TN295.U4 [TN490.C4] 622s [553.4'643] 82-600208 



4 



III 



V 



PREFACE 



The purpose of the Bureau of Mines Minerals Availability Program is to assess the 
worldwide availability of nonfuel minerals. The program identifies, collects, compiles, and 
evaluates information on active, developed, and explored mines and deposits, and on 
mineral processing plants worldwide. Objectives are to classify domestic and foreign 
resources, to identify by cost evaluation resources that are reserves, and to prepare 
analyses of mineral availabilities. 
^ V) This report is part of a continuing series of Minerals Availability System (MAS) reports 

that analyze the availability of minerals from domestic and foreign sources and the factors 
that affect availability. Analyses of other minerals are currently in progress. Questions 
about the MAS program should be addressed to Director, Division of Minerals Availability, 
Bureau of Mines, 2401 E Street, N.W., Washington, D.C. 20241. 




CONTENTS 



Page 

Preface iii 

Abstract 1 

Introduction 2 

Acknowledgements 2 

Estimating chromium resource and cost data 3 

Domestic chromite deposits 4 

General 4 

Geology 4 

Extraction methods and costs 5 

Availability of chromium from domestic deposits 6 

General 6 

Chromite concentrate availability 7 

Total chromite 8 

Annual chromite 8 

Ferrochromium concentrate availability 9 

Conclusions 10 

Bibliography 11 

Appendix A. — Ownership and control of domestic chromium properties 12 

Appendix B. — Mining methods 13 

Appendix C. — Research and development 13 

Appendix D. — Cost analysis of an open pit mining and milling operation 14 

ILLUSTRATIONS 

1 . Classification of mineral resources 2 

2. Flow chart of evaluation procedure 3 

3. Location of domestic chromite properties 5 

4. Chromium total resource availability, 1 5-percent rate of return 8 

5. Chromium annual resource availability, 1 5-percent rate of return 8 

6. Ferrochromium total resource availability, 1 5-percent rate of return 9 

7. Ferrochromium annual resource availability, 15-percent rate of return 10 

TABLES 

1 . Chromite deposit resource information 4 

2. Chromite-laterite deposit resource information 5 

3. Chromite deposit status and proposed mining and beneficiation methods 6 

4. Estimated costs for mining and beneficiating domestic chromite resources 6 

5. Chromite concentrate data 7 

6. Potential recoverable Cr 2 3 contained in chromite concentrates at various prices 8 

7. Potential recoverable ferrochromium at various ferrochromium prices 9 

A-1 . Ownership and control of domestic chromium properties 12 

D-1. Estimated capital requirements for a 1 ,900-metric-ton-per-day open pit mining and milling operation 14 

D-2. Estimated operating costs for a 1 ,900-metric-ton-per-day open pit mining and milling operation 14 

D-3. Deposit operating data required for the economic evaluation of the 1 ,900-metric-ton-per-day open pit 

mining and milling operation 14 

D-4. Cumulative values derived for the economic evaluation of the 1 ,900-metric-ton-per-day open pit 

mining and milling operation 14 



CHROMIUM AVAILABILITY— DOMESTIC 
A Minerals Availability System Appraisal 

By Jim F. Lemons, Jr., 1 Edward H. Boyle, Jr., 2 and Catherine C. Kilgore 2 



ABSTRACT 



The Bureau of Mines Minerals Availability System collected and analyzed data for 34 
nonlaterite and 9 nickeiiferous laterite domestic chromite deposits in order to assess their 
viability as sources of chromium under present technologic and economic conditions. 
These 43 deposits, none currently in production, contain approximately 6.3 and 22.3 million 
metric tons of Cr 2 3 at the demonstrated and identified resource levels, respectively. 

Approximately 4.6 and 15.6 million metric tons of Cr 2 3 are recoverable at the 
demonstrated and identified levels, respectively, for the 34 nonlaterite deposits. None of 
these resources are economically recoverable at January 1981 market prices. Production 
of metallurgical-grade chromite (market price $128 to $144) would require a minimum 
chromite market price of $237 per metric ton. Chemical-grade chromite production (market 
price $74 to $85) would require a chromite market price in excess of $188 per metric ton. 

From the 34 nonlaterite deposits, roughly 5.4 and 1 7.6 million metric tons of ferrochrome 
could be produced at the demonstrated and identified resource levels, respectively; 
however, a minimum market price of $770 per metric ton of ferrochrome would be required 
to stimulate production. 

The nine nickeiiferous laterite deposits were not evaluated through production stages 
because of uncertainties in process technology and cost. 



1 Metallurgist, Minerals Availability Field Office, Bureau of Mines, Denver, Colo. 

2 Geologist, Minerals Availability Field Office, Bureau of Mines, Denver, Colo 



INTRODUCTION 



Although chromium is essential for producing stainless 
steel superalloys and industrial hard plating, and also has a 
wide range of usage in other alloy steels, pigments, and 
plating, the United States is almost entirely dependent upon 
imported sources for its chromium. Production from domestic 
sources has been sporadic, occurring during periods of high 
prices or price support, primarily during national emergen- 
cies. The last production occurred in 1962. During periods in 
which international trade is not restrained, production from 
primary domestic sources has not been economically 
competitive with foreign sources. 

Apparent annual domestic consumption of chromium 
approximates 500.000 metric tons. Net import reliance is 
reported to be 90 percent, with the remaining 10 percent 
satisfied by recycled chromium (13). 1 The critical nature of 
chromium, combined with this high degree of foreign 
dependence, indicates the need for reliable information on 
possible sources of domestic supply. Accordingly, this study 
of the availability of chromium from domestic sources was 
developed by the Bureau of Mines. Minerals Availability 
System (MAS), with the intention that this information can 
contribute to the formation of minerals policy. 

The following procedure was used in conducting the study: 

1. The quantity and quality (grade, iron content, etc.) of 
domestic chromite resources were evaluated in relation to 
physical, technological, institutional, and other conditions 
that affect production from each deposit. 

2. The capital investments and operating costs for 
appropriate mining, concentrating, and processing methods 
were estimated. 



3. An economic evaluation was performed on each 
deposit. The results of these analyses indicated the unit 
prices and associated tonnages of contained chromic oxide 
(Cr 2 3 ) and ferrochromium that could be recovered at 
specified production levels for each deposit. 

4. Price-production relationships were combined and 
analyzed as contained Cr 2 3 and ferrochromium availability 
curves to show the domestic chromium production potential 
at various commodity prices. 

Results of this study are reported in terms of recoverable 
Cr 2 3 and ferrochromium at demonstrated and identified 
resource levels, as these levels are defined in the mineral 
resource-reserve classification system developed jointly by 
the Bureau of Mines and the U.S. Geological Survey (14). 
The demonstrated resource category includes measured and 
indicated tonnages, and the identified resource category 
includes inferred as well as demonstrated tonnages (fig. 1). 
These definitions indicate a greater degree of credibility in 
the results at the demonstrated resource level. Not all of the 
deposits that have identified resources will have demon- 
strated resources, because the classification is dependent 
upon available geologic and mineralogic data. As additional 
data become available, deposit resources could be reclas- 
sified. 

For comparison with current market requirements, the 
Cr 2 3 concentrate grade and the chromium-to-iron (Cr:Fe) 
ratio are also identified. Curves indicate both total and annual 
potential resource availability for recoverable Cr 2 3 and 
ferrochromium. 



ACKNOWLEDGMENTS 



The authors wish to thank Larry J. Alverson, formerly with 
the Bureau of Mines, Division of Nonferrous Metals, for his 



3 Italicized numbers in parentheses refer to items in the bibliography 
preceding the appendixes. 



assistance in establishing the resource tonnages and grades 
included in this report. Personnel at Bureau of Mines Field 
Operations Centers in Pittsburgh, Pa., Spokane, Wash.. 
Denver, Colo., and Juneau, Alaska, supplied production and 
cost data for the deposits included in this study. 



Cumulative 
Production 



IDENTIFIED RESOURCES 



Demonstrated 



Measured Indicated 



Inferred 



UNDISCOVERED RESOURCES 



Hypothetical 



Probability Range 
-(or)- 



Speculative 



ECONOMIC 



MARGINALLY 
ECONOMIC 



SUB- 
ECONOMIC 



Reserve 



Base 



Inferred 



Reserve 



Base 



+ 



4- 



Other 
Occurrences 



Includes nonconventional and low-grade materials 



Figure 1 . — Classification of mineral resources. 



ESTIMATING CHROMIUM RESOURCE AND COST DATA 



The flow of the MAS evaluation process from deposit 
identification to development of availability curves is illus- 
trated in figure 2. This flowsheet shows the various 
evaluation stages used in this study to assess the quantity 
and economics of the chromium available from a property. 

Of the 43 domestic deposits investigated (none currently in 
production), 34 were selected for analysis in this study. 
Deposits that could share common mills were combined for 
analysis, resulting in 16 separate evaluations. The nickelifer- 
ous laterites were not analyzed in terms of potential 
production because of technological and cost uncertainties. 

Selection of the deposits for this study was limited to 
known deposits that have significant demonstrated or 
identified reserves or resources. Resources are concentra- 
tions of naturally occurring solid, liquid, or gaseous materials 
in or on the Earth's crust in such form that extraction of a 
mineral commodity is currently or potentially feasible. 
Reserves are resources that can be mined, processed, and 
marketed at a profit under the economic and technologic 
conditions prevailing at the time of the evaluation. 

Most reserve and resource tonnage and grade calculations 
presented here were computed partly from specific measure- 
ments, samples, or production data, and partly from 
estimations based on geologic evidence. 

After all deposits were identified for analysis by the Bureau 
of Mines Division of Minerals Availability, evaluations of 
these properties were performed at the Bureau's Field 
Operations Centers. Data on average grades, ore tonnages, 
and different physical characteristics affecting production 
from domestic chromite deposits were obtained from 
numerous sources, including Bureau of Mines and Geologic- 
al Survey publications, professional journals, State and 
industry publications, annual reports, company 10K reports 
filed with the U.S. Securities and Exchange Commission, 
data made available to the Bureau of Mines by private 
companies, and estimates made by Bureau personnel based 
on personal knowledge and judgments. 

The next step entailed an examination of the physical 
characteristics of each deposit in order to establish a 
development plan for each property that would yield a 



'< I 


dentification 
and 














j Mineral 

Industries 1 

J Location 1 

s System 1 

1 (MILS) : | 

data i 

i 

MAS 

computer 

data 

base 


selection 
of deposits 




w 


















Tonnage 

and grade 

dete rmination 








P 




w 


















1 




Enginee ring 

and cost 

eva 1 u ation 






p 












+ 








f 1 




Deposit 

report 

preparation 




MAS 

per manent 

deposit 

files 




' 


1 


r 
























w 



marketable product. Development requirements and produc- 
tion capacities were based on current mining engineering 
and metallurgical principles. Capital requirements were 
calculated for exploration, acquisition, development, mine 
plant and equipment, and constructing and equipping the mill 
plant. Capital expenditures for the different mining and 
processing facilities include the costs of mobile and 
stationary equipment, construction, engineering, facilities 
and utilities, and working capital. The broad category — 
facilities and utilities (i.e., infrastructure) — includes, among 
other things, the cost of the water system, fire protection, 
roads, fences, and fuel and power distribution. Working 
capital is a revolving cash fund required for operating 
expenses such as labor, supplies, taxes, and insurance. 

Mine and mill operating costs were also calculated for each 
deposit. The total operating cost is a combination of direct 
and indirect costs; direct operating costs include materials, 
utilities, direct and maintenance labor, and payroll overhead, 
while indirect operating costs include technical and clerical 
labor, administrative costs, facilities maintenance and 
supplies, and research. Other costs in the analysis are fixed 
charges such as local taxes, insurance, depreciation, 
deferred expenses, interest payments (if applicable), and 
return on investment. 

When possible, actual company cost data were used. If 
these were not available, the required capital and operating 
costs were estimated by standardized costing techniques or 
through the use of a Cost Estimating System (CES) that was 
developed for the Bureau of Mines (4). This costing system 
was designed for preparing capital and operating cost 
estimates through the use of equations, curves, and factors. 
The system, based on an average of the costs for existing 
mining operations in the United States and Canada, covers 
operations of various sizes. Correct use of the costing 
system will produce reliable estimates, which historically 
have fallen within 25 percent of actual costs. 

Both feasibility and consistency in these mineral property 
evaluations, development plans, and associated costs were 
confirmed and verified at the Bureau's Minerals Availability 
Field Office, where these data were subsequently used to 



Taxes, 

royalties, 

cost indexes, 

prices, etc. . 



Data 

selection and 

va I idation 



Variable and 
parameter 
adjustments 



Financial 
analysis 



Data I 



Sensitivity 
analysis 



Availabilityi 
curves 



Analytical 
reports 



J 



Data 



Availability 
curves 



Analytical 
reports 



Figure 2. — Flow chart of evaluation procedure. 



387-181* 0-82-2 



perform an economic evaluation of each property. This was 
accomplished through the use of two Bureau-developed 
computer systems: MINSIM (i.e.. MINe SIMulator) for the 
economic evaluation of individual mineral properties (2), and 
the Supply Analysis Model (SAM) that is used to evaluate all 
properties in a defined mineral commodity study area (e.g., 
domestic chromium) (6). The output of this economic 
evaluation process is the primary commodity price needed to 
provide a stipulated rate of return. The rate of return used in 
this study is the discounted cash flow rate of return 



(DCFROR), most commonly defined as the rate of return that 
makes the present worth of cash flows from an investment 
equal to the present worth of all after-tax investments (11, p. 
232). For this study, a 15-percent DCFROR was considered 
necessary to cover the opportunity cost of capital plus risk. 
Individual deposit tonnage price data were then aggre- 
gated by the SAM to construct the resource availability 
curves presented in this study. The study was conducted in 
constant January 1981 dollars. No escalation of either costs 
or prices was included. 



DOMESTIC CHROMITE DEPOSITS 



GENERAL 

Tables 1 and 2 show resource information for each of the 
43 domestic deposits for which data were collected by the 
Bureau of Mines. The nine laterite deposits (table 2) have 
potential for future recovery of chromite; however, an 
evaluation in terms of cost and price of these deposits was 
not performed at this time because of technological and cost 
uncertainties. As noted in tables 1 and 2, the deposits contain 
6.3 and 22.3 million tons of contained Cr 2 3 at the 
demonstrated and identified resource levels, respectively." 
Locations of the chromite deposits are shown on figure. 3. 
Ownership and control data for each property are presented 
in table A-1 of appendix A. 

GEOLOGY 

Chromite deposits are formed by primary genesis and 
secondary reconcentration. Primary genesis occurs by the 

" Tonnage estimates presented in this study are reported in metric tons. To 
convert from metric tons to short tons, multiply by 1.10231. 



crystallization of chromite and other heavy silicates such as 
olivines and pyroxenes. Secondary chromite deposits are 
derived from the weathering of chromite-bearing rocks in 
which the chromite then accumulates either as sedimentary 
(placer) deposits, or in lateritic soils concentrated in situ by 
ground water leaching of highly weathered ultramafic rocks. 

Chromite of primary genesis origin occurs principally in 
stratiform and podiform (alpine) deposits. Stratiform de- 
posits, characterized by great lateral extent and uniformity, 
generally contain low Cr:Fe ratio material. The chromite 
occurrences of the Stillwater Complex in Montana typify 
stratiform deposits. Podiform deposits, formed as lenticular 
or tabular pods, are usually composed of high-chromium or 
high-aluminum type chromite ore. Deposits of this type 
include Claim Point and Red Bluff Bay, Alaska, and the Bar 
Rick and Pilliken Mines in California. 

The secondary deposits, derived from reworking and 
concentrating the primary deposition, are composed of 
placer and laterite deposits. Principal known placer deposits 
are the Oregon Beach Sands. Laterite deposits occur in 
northwestern California and southwestern Oregon. 

Before 1940, all domestic production was from podiform 



Table 1 . — Chromite deposit resource information 



Property 



State 


Grade, 


Demonstrated, 1 
thousand metric tons 


Identified, 
thousand metric tons 




percent 
Cr 2 3 


Mineralized 
material 


Contained 
Cr 2 3 


Mineralized 
material 


Contained 
Cr 2 3 


Alaska 


17.8 


267 

30 




47.6 
3.6 



267 

30 

183 


47.6 


..do 

. .do 


12.0 
25.8 


3.6 
47.2 


California 

..do 

..do 

..do 

. .do 


7.6 
W 

11.9 
5.0 
5.0 


5,065 
W 



4,546 


384.9 
W 




227.3 


44,512 

W 

104 

30,975 

10,826 


3,382.9 

W 
12.4 
1,548.8 
541.3 


Georgia 


.4 


131 


.6 


131 


.6 


Maryland- 
Pennsylvania. 


1.4 


729 


10.1 


729 


10.1 


Montana 

. .do 


w 

15.0 


w 

500 


W 
75.0 


w 

854 


w 

128.1 


North Carolina 


1.9 


108 


2.1 


178 


3.5 


Oregon 


5.6 


10.827 


604.1 


45,772 


2,554.1 


Pennsylvania 


1.7 


209 


3.5 


209 


3.5 


Wyoming 


2.5 
NAp 


3,774 


92.5 


3,774 


92.5 


NAp 


46.604 


5.620.6 


194.019 


19,333.2 



Claim Point 

Red Bluff Bay 

Red Mountain 

Bar Rick Mine 

McGuffy Creek 

North Elder Creek 2 

Pilliken Mine 

Seiad Creek Emma Bell 

Louise Chromite 

West Placer Area 3 

Stillwater Complex: 

Mouat Benbow 

Gish Mine 

North Carolina Area 2 

Southwest Oregon Beach Sands 

Renshaw Placer . '. 

Casper Mountain 

Total" 



NAp Not applicable. W Withheld to avoid disclosing individual company proprietary data; included in total. 
' Domestic chromite reserve base 

2 Includes 3 deposits that have been combined for analysis. 

3 Includes 13 deposits that have been combined for analysis. 

* Includes resources withheld to avoid disclosing individual company proprietary data. 



Table 2. — Chromite-laterite deposit resource information' 



Property 



Stale 



Grade 
percent 
Cr,0, 



Demonstrated, 
thousand metric tons 



Identified, 
thousand metric tons 



Mineralized 
material 



Contained 



Mineralized 
material 



Contained 
Cr,0 3 



Pine Flat Area: 

Gasquet Laterite .... 
Little Rattlesnake . . . 
Lower Elk Camp .... 
Pine Flat Mountain . . 
Red Mountain 

Eight Dollar Mountain 

Red Flat 

Rough and Ready . . . 
Woodcock 

Total 2 



California . 

. . do 

..do 

..do 

. .do 

Oregon . . . 

..do 

. .do 

. .do 

NAp 



w 


W 


W 


w 


W 


w 


w 


W 


w 


W 


w 


w 


W 


w 


W 


2.8 


6.382 


1787 


15.052 


421 5 


W 


W 


W 


W 


W 


1.1 








13.023 


145.9 


w 


W 


W 


W 


W 


1.5 








5.931 


90.7 


1.3 


n 


n 


R5R7 


11?5 



NAp 



33.813 



6400 



143.126 



2.9954 



NAp Not applicable. W Withheld to avoid disclosing individual company proprietary data; included in total. 

1 Not included in cost-price analysis because laterite-process technology has not been commercially proven. 

2 Includes resources withheld to avoid disclosing individual proprietary data. 



deposits, but since then production from the stratiform 
deposits of the Stillwater Complex has predominated. The 
majority of the podiform deposits have yielded less than 
1 ,000 tons each and have been economically insignificant. 

EXTRACTION METHODS 
AND COSTS 

This study includes deposits that have produced in the 
past as well as deposits that have no recorded production. 
Each of these deposits has sufficient resource information so 
that a mining and beneficiation method can be proposed. The 
mining and beneficiation methods proposed are based on 



those methods used in past domestic production of chromite 
ores. Thus, recovery of chromite is based on standard placer, 
open pit, and underground mining methods. The location, 
deposit type, status, proposed annual capacity, and mining 
and benefication methods for the deposits are shown in table 
3. A brief description of the mining method of each deposit is 
given in appendix B. Many of the deposits are small, 
particularly those in the Eastern United States, requiring use 
of highly mobile, small-capacity mining equipment and 
portable process equipment. 

Beneficiation of mined ore is designed to upgrade the 
Cr 2 3 content, or increase the Cr:Fe ratio of the chromite; 
however, most beneficiation of mined ore does not signifi- 



f*?&5Pln« Flat Area 
^AfJSeiad/Emmo Bell 

Bar Rick Mc6u,f * CrMk ~~ 
. Q oNorth Elder Creek 

/Red Mtn. 
PillikenO 




Reserve Base-metric tons contained CrJOy 
o Less than 100,000 
• 100,000-1,000,000 
■ More than 1,000,000 

Figure 3 — Location of domestic chromite properties. 



Table 3. — Chromite deposit status and proposed mining and beneficiation methods 



Property 



State 



Type of 
deposit 



Status' 



Minimum 

lead time, 

years 



Annual 

capacity. 

metric tons 

of ore 



Mining 
method 



Beneficiation 
method 



Claim Point 
Red Bluff Bay 
Red Mountain 


Alaska 

do 

do 


Podiform 
do . . . 
do 


Ppd 
Exp 
Ppd 


4 
2 
2 


18,000 

9,000 

18.000 


Bar Rick Mine 
McGufty Creek 


California 

.do 


do . . 

do 
do . . . 

do , , . 
do ... 


Ppd 

Ppd 

Ppd 

Ppd 
Ppd 


2 
2 

1 

2 
3 


350,000 
787 500 


North Elder Creek-' 

Pilhken Mine 


.. ..do 

. . . .do 


25,000 
2,100,000 


Seiad Creek Emma Bell 


. . . . do 


562,500 


Louise Chromite 


Georgia 


Placer 


Exp 

Ppd Dev 


1 


25,000 


West Placer Area 3 


Maryland- 


do . . . 


1 


50,000 




Pennsylvania 




Stillwater Complex: 
Mouat Benbow 


Montana . . 


Stratiform 
. . do . . . 


Ppd 
Dev 


3 
2 


525,000 


Gish Mine 


.. ..do 


175,000 


North Carolina Area 2 


North Carolina 


Placer . . 


Ppd Dev . 


1 


25,000 


Southwest Oregon Beach 
Sands, 


Oregon 


. . do . . . 


Ppd 


2 


1,000.000 


Renshaw Placer 


Pennsylvania . 


. . do . . . 


Ppd 

Exp 


1 


50,000 


Casper Mountain 


Wyoming 


Stratiform 


3 


377,260 



Open pit Gravity, 

. .do Do. 

Overhand Do. 

shrinkage. 
Sublevel stope . . Do. 

Open pit Do, 

..do Do. 

.do Gravity-magnetic. 

do Gravity. 

. .do Gravity- 
electrostatic. 
Placer mining . . . Do. 



Shrink stope .... Gravity. 
. . do Do. 

Open pit Gravity- 
electrostatic. 

Strip Gravity-magnetic- 
electrostatic. 

Open pit Gravity- 
electrostatic. 
. . do Gravity. 



' Dev — Developing mine; Exp — Explored deposit; Ppd — Past producer. 

2 Includes 3 deposits combined in the analysis. 

3 Includes 13 deposits combined in the analysis. 



cantly improve the Cr:Fe ratio, but can increase the total 
Cr 2 3 content by separation of gangue. The ore is typically 
concentrated in a series of gravity-concentrating steps 
involving tables, spirals, and jigs, with middlings being 
reground or reseparated. In limited cases, the concentrate 
can be further upgraded with electrostatic separation; this 
method will improve the Cr:Fe ratio, but typically works only 
for high-iron, fine-ground chromites. The current MAS study 
is based on gravity and electrostatic beneficiation. Chemical 
separation methods that use flotation or laterite leach-gravity 
combinations are being investigated at Bureau of Mines 
research facilities. These methods are discussed in appendix 
C. 

Data in table 4 indicates the range of costs estimated for 
mining and beneficiating the material of the deposits 
analyzed in this study. The mining costs have a large 
variance due to the types and sizes of the operations; there is 
less variance in the beneficiation costs because the same 
basic process (gravity separation) is used at all the 
operations. 

Accordingly, a future cost reduction in underground mining 
and/or gravity separation could have a significant impact on 
the availability of domestic chromium. 



At the demonstrated resource level, roughly 80 percent of 
the contained Cr 2 3 would be produced by higher cost, larger 
underground methods, 8 percent by larger open pit 
operations, and 1 1 percent by larger placer operations; less 
than 1 percent of the chromite production would be 
attributable to smaller operations. 

Table 4. — Estimated costs for mining and 
beneficiating domestic chromite resources 

(January 1981 dollars) 



Type of 
operation 


Ore processed per 
year, metric tons 


Typical capital cost 

per annual metric 

ton of ore 


Operating 
metric tor 

Mine 


cost per 
i of ore 3 




Mine 1 Mill 2 


Mill 


Small placer . 
Large placer . 

Open pit 

Underground. 


. 20,000-50,000 
Over 250,000 
Over 250,000 
Over 250,000 


$3-$4 $14-$16 
4- 6 13- 14 
8-22 9- 18 

21-36 16- 21 


$2-$3 
1- 2 
4-11 

16-33 


$6-$ 10 
4- 5 

3- 4 

4- 6 



1 Mine capital costs include exploration, development, acquisition, mine 
equipment, and mine plant. 

2 Mill capital includes plant and equipment. 

3 Operating costs include direct and indirect costs, but do not include 
{fepreciation or interest. 



AVAILABILITY OF CHROMIUM FROM DOMESTIC DEPOSITS 



GENERAL 

One function of the MAS program involves performing an 
engineering cost study to determine the commodity price 
required to produce a specified level of output from a mineral 
deposit. Commodity price is defined as the average total cost 
(ATC) of production from the deposit. Profit, included in the 
estimate of ATC, is computed at a 1 5-percent DCFROR. The 
commodity price can also be defined as the "incentive price" 
of the deposit, or the price necessary for a firm to be willing to 
develop the property, including recovery of and return on 
capital investment (1, pp. 1-25). An illustration of the costing 
and results of the economic evaluation of a hypothetical 
chromium operation is included in appendix D. 



The quantity of chromium that could be produced and the 
commodity price required to achieve this production are 
determined based on the following assumptions: 

1 . Preproduction for each deposit began in January 1 981 . 

2. Each operation will produce at full operating capacity 
throughout its life. 

3. Competition and demand conditions are such that each 
operation will be able to sell all of its output at its ATC. 

4. The competing market area for the chromium concen- 
trates and ferrochrome is in the Eastern United States. 

5. Prices for the chromite concentrates and ferrochrome 
are CIF (i.e., cost, insurance, and freight paid by the shipper) 
the marketing area in the Eastern United States. 



6. For comparative purposes, the price for chromite 
concentrates is based upon the Cr 2 3 content. 

7. Current tax structures and 100-percent equity were 
used in all simulations. 

The third assumption implies that the level of demand will 
support the highest ATC, or that Government subsidies 
would equal the difference between the market price and the 
ATC for each submarginal deposit. 

The fourth assumption states the basis for the established 
prices with which domestic chromium production would 
compete. Two market conditions were analyzed: 

1 . Chromite concentrates would be transported and sold 
to existing ferrochromium plants in the Eastern United 
States. 

2. Western chromite concentrates would be processed 
into a ferrochromium product, with the assumption that 
ferrochromium plants would be "constructed" at or near the 
deposits. The ferrochromium product would then be trans- 
ported to the market in the Eastern United States. The 
chromite concentrates produced at the deposits in the 
Eastern United States would be transported to existing 
ferrochromium plants for further processing. 

Time lags involved in filing environmental impact state- 
ments, receiving necessary permits, financing, etc., were 
considered, but were not included in the analysis since it was 
felt that such delays would be minimized in consideration of 
strategic availability. 

With price and quantity data determined for each deposit, 
total resource availability curves were constructed for 
chromium. Total resource curves were constructed forCr 2 3 
contained in chromite concentrates, and for ferrochromium. 
The total resource availability curve is not a supply curve in 
the traditional sense because it ignores the parameter of 
time, nor is it the industry's marginal cost curve. Rather, the 
resource availability curve is an aggregate of total production 
potential from the industry at a stipulated commodity price 
that covers the full cost of production. 

Of primary concern to Government policymakers is not 
only the question of how much total recoverable chromium 
exists domestically, but also the amount that could be 
recovered annually. When performing the engineering 
analysis of each deposit, Bureau of Mines engineering 
personnel proposed a development, schedule and capacities 
for each deposit. Such factors as the relative location of the 
deposit and the necessity for further exploration, develop- 
ment, and plant construction affect the time required to 
develop each deposit. Also, the depth of overburden, type of 
mining method employed, and amount of infrastructure 
required to develop the deposit are significant factors 
influencing the time lag between initial development and 
startup. 

The annual curves presented in this study are disaggrega- 
tions of the total resource curves to an annual production 
basis. These discontinuous functions relate the level of ATC 
for individual deposits to the cumulative level of produqtion 
from the deposits over a period of a year. They more closely 
resemble true supply curves, since they show production on 
an annual basis, but they also indicate average total cost 
rather than the marginal cost of production. Constructed 
annual curves show the Cr 2 3 in concentrate and the 
ferrochromium potentially recoverable from domestic de- 
posits. 



CHROMITE CONCENTRATE 
AVAILABILITY 

Chromium ores are classified according to their Cr 2 3 
content, the Cr:Fe ratio of the concentrates, and, in the case 
of refractory-grade ore, the total aluminum plus chromium 
content. Traditionally, the nonrefractory materials are clas- 



sified as high-chrome (metallurgical-grade) and high-iron 
(chemical-grade) concentrates, as follows: 



Percent Cr 2 3 Cr:Fe ratio 



Metallurgical grade 
Chemical grade . . 



5= 46 

40-46 



2:1 
.5:1 to 2:1 



End use and price of the chrome concentrate is 
determined by the Cr 2 3 content and Cr:Fe ratio. Tonnage 
and price-cost relationships in this study are based on either 
Cr 2 3 content of the concentrate, or ferrochromium. The mill 
concentrate grade, Cr:Fe ratio, and chromite classification for 
the material derived from the 34 deposits considered in this 
study are shown in table 5. 



Table 5. — Chromite concentrate data 



Property 


State 


Mill concen- 


Esti- 


Chromite 






trate grade, 


mated 


classifi- 






pet Cr 2 3 


Cr:Fe 
ratio 


cation' 



Claim Point Alaska 

Red Bluff Bay do 

Red Mountain do 

Bar Rick Mine California 

McGuffy Creek do 

North Elder Creek do 

Pilliken Mine do 

Seiad Creek/Emma do 

Bell. 

Louise Chromite Georgia 

West Placer Area .... Maryland- 
Pennsylvania. 

Stillwater Complex: 

Mouat/Benbow Montana 

Gish Mine do 

North Carolina Area . . North Carolina. 

Oregon 



Southwest Oregon 
Beach Sands. 

Renshaw Placer Pennsylvania 

Casper Mountain Wyoming .... 



45.0 
42.0 
44.0 


2.7:1 

2 1.6:1 

3:1 


HC 

HI 
HC 


44.0 
41.5 
44.0 
44.0 
41.5 


2.4:1 

2.5:1 

3:1 

1.5-2.7:1 

1.5-2.4:1 


HC 
HC 
HC 
HC 
HI 


31.0 


1.9:1 


HI 


38.7 


1.6:1 


HI 


42.4 
41.2 


1.7:1 
1.7:1 


HI 
HI 


55.0 


1.9:1 


HI 


42.0 


1.5:1 


HI 


40.0 


2 1.6:1 


HI 3 


44.7 


2.4:1 


HC 



1 Concentrate grade is based on grade categories as specified in Mineral 
Facts and Problems (12). High-chromium (HC) concentrates have tradi- 
tionally been used by the metallurgical industry, while high-iron (HI) has 
traditionally been used by the chemical industry. The HC grades listed here 
would be marginal; they show a Cr:Fe ratio of greater than 2:1 but a Cr 2 3 
grade greater than or equal to only 44 percent. 

2 No Cr:Fe ratio was specified, but the grade "chemical" was given. Such 
specifications were assumed to give a Cr:Fe ratio of 1.6:1. 

3 Concentrate from this deposit may be classified as refractory grade. The 
ore contains more than 20 percent aluminum oxide (Al 2 3 ) and more than 
60 percent Al 2 3 plus Cr 2 3 . 



Since the value of the material is based upon quality, 
prices shown in the tables and illustrations in this study are 
based on the Cr 2 3 content of the concentrates. (The 
concentrates consist of an oxide of iron and chromium — 
FeCr 2 4 .) Therefore, to permit a comparison of the cost of 
potential production from domestic sources to imported 
material used by the U.S. industry, the chromite prices of the 
imported material were converted to equivalent Cr 2 3 
content price by dividing the current market prices by the 
associated Cr 2 3 grade. 

According to current industry information, the pricing 
structure for chemical-grade material having a Cr:Fe ratio 
ranging from 1.5:1 to 2.0:1, and aCr 2 3 grade ranging from 
39 to 46 percent, ranges from $74 to $85 per metric ton CIF 
the marketing area of the Eastern United States. Similarly, 
the pricing structure for metallurgical-grade material having a 
Cr:Fe ratio of from 3.0:1 to 3.9:1 , and a Cr 2 3 grade from 46 
to 53 percent, ranges from $128 to $144 per metric ton CIF 
the marketing area of the Eastern united States. 

For purposes of deriving a price with which domestic 
production could compete, the price assumed in this study 



was $79 per metric ton CIF the United States for 
chemical-grade chromite with a 40-percent-Cr.-O 3 content. A 
price of $136 per metric ton CIF the United States was used 
as the competitive price for a metallurgical-grade chromite 
with a 46-percent-CnOji content. These prices, converted to 
metric tons of contained Cr 2 3 , are as follows: 



Chemical-grade, metric 
ton 

Metallurgical-grade, 
metric ton 



Chromite 

market price 

(CIF United 

States) 

$ 79 
136 



Price of 

contained 

Cr 2 Q 3 

$198 
296 



Total Chromite 

Total chromite availability at the demonstrated and 
identified resource level is shown in figure 4. Metallurgical- 
grade chromite is shown with dotted lines and chemical- 
grade chromite with solid lines. 

In the analysis, the incentive price and associate tonnage 
for the identified resource can vary from that for the 
demonstrated resource. Some properties included in this 
study have the same tonnage at the demonstrated and 
identified resource levels (table 1). In these instances, the 
incentive price remains constant. Other properties have 
increased tonnage at the identified level, because they have 
additional inferred tonnage. The incentive price could 
decrease owning to the additional tonnage, which would 
increase the life of the operation, thus allowing the capital 
expenditure to be amortized by additional recoverable units. 
Some properties have only inferred tonnages, thus increas- 
ing the total identified resource. The incentive price would 
apply to this inferred tonnage. 

At the demonstrated resource level, 4.6 million metric tons 
of Cr 2 3 in chromite concentrates are potentially recoverable 
over a production period of 48 years. At the identified 
resource level, potentially recoverable Cr 2 3 increases about 
240 percent, to 15.6 million metric tons over a production 
period of 59 years. 

Table 6 shows potential recovery of metallurgical- and 
chemical-grade chromite at various commodity prices. 
Nearly 90 percent of the resources at the demonstrated level, 
and over 70 percent at the identified level, would be 
chemical-grade chromite. 



Table 6. — Potential recoverable Cr 2 3 contained 

in chromite concentrates at various prices, 

thousand metric tons 

(January 1981 dollars) 

Cr-,0 Drice' Demonstrated level Identified level 

per metric ton Chemical Metallurgical Chemical Metallurgical 

Less than $600 . . . 3,840 10,650 3,850 

$600-$900 60 400 110 370 

$901-$1200 190 70 460 120 

More than $1200 20 30 20 30 

Total 4,110 500 11,240 4,370 

' Price based on a metric ton of contained Cr 2 3 . 



At the current market price for chemical-grade chromite, 
$1 98 per metric ton of contained Cr 2 3 , no domestic chromite 
is economically available at either the demonstrated or 
identified resource level. In addition, no metallurgical-grade 
chromite could be economically produced at the demon- 
strated level, assuming today's market price of $296 per 
metric ton of contained Cr 2 3 . 

Annual Chromite 

Based on Cr 2 3 content, annual domestic consumption of 
chromite in 1979 was 441 ,000 metric tons. Consumers were 
the metallurgical industry (high-chrome chromite) — 64 per- 
cent, the chemical industry (high-iron chromite) — 22 percent, 



2,000 



n=bose year of analysis, 
~ preproduction begins 



1,600 

1,400 

1,200 

1,000- 
800 
600: 
400- 
200 



n + 4 



Metallurgical-grade chromite 
Chemical-grade chromite 
n+2 



Demonstrated resources 

_l 



50 



100 



200 



300 



2,400 
o" 2,200 

CSJ 

o 2,000 

a 

£ 1,800 

* X '.600 

<-> -g I.' 

z _ 

o a> i,200 

v- m 

Si ? 1,000 

!: g 800- 

2 -> 

a: 600 

Q. 

40C- 

o 

£ 200 

a. 





Demonstrated 
resources 



Metallurgical-grade chromite 
Chemical-grade chromite 



I 



Identified resources 



/ 



_L 



2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 
TOTAL RECOVERABLE Cr 2 3 CONTAINED IN CHROMITE CONCENTRATES, 
thousand metric tons 

Figure 4. — Chromium total resource availability, 
1 5-percent rate off return. 



2,000 

1,800 

1,600 

I 1,400 

i 1,200 

! 1,000 

800 
600 

400 

200 





1 1 1 

n=bose year of analysis, 
preproductiort begins 

Metallurgical-grade chromite 

Chemical-grade chromite 



Identified resources 

J 



1 

n + IOn+6 



J J 



200 



300 



RECOVERABLE Cr 2 3 CONTAINED IN CHROMITE CONCENTRATES, 
thousand metric tons 

Figure 5. — Chromium annual resource 
availability, 1 5-percent rate of return. 



and the refractory industry — 14 percent. Consumption in 
1979 was at the highest level since 1974. 

Although no chromite is being produced by U.S. mines, 
potential annual production (based on Cr 2 03 content) is 
shown in figure 5; metallurgical-grade chromite is shown with 
dotted lines and chemical-grade with solid lines. As shown in 
the figure, at the demonstrated resource level and at a price 
of about $600 per metric ton (significantly above current 
market price), an estimated 35,000 metric tons could be 
produced 2 years after preproduction begins. At $600 per 
metric ton, production could increase to 140,000 metric tons 
in year 4, but would begin to decrease shortly thereafter. As 
mentioned earlier, this decrease reflects the static nature of 
this study. Future technological developments, the discovery 
of additional ore bodies, and an increase in commodity price 
would, with time, reduce the effect of scarcity, and shift the 
curves to the right. 

Potential annual production would increase at the iden- 
tified resource level because of the addition of properties that 
are not defined at the demonstrated resource level, and also 
because of expanded production at operations located on 
smaller demonstrated reserves. At a $600 commodity price, 
nearly 400,000 metric tons could be produced after 2 years. 

As shown in figure 5, chromite produced from domestic 
sources would, in most cases, cost significantly more to 
produce than that currently being imported. At the demon- 
strated resource level, possible annual production would be 
small and of short duration, decreasing after the fourth year. 
At the identified level, production could be significantly 
greater and could remain fairly constant for at least 1 years. 



FERROCHROMIUM CONCENTRATE 
AVAILABILITY 

Commercial ferrochrome production dates back to the 
1860's, when low-grade ferrochrome averaging 7 to 8 
percent chromium was produced by direction reduction of 
chromite and chromiferrous iron ores with coke or coal in a 
blast furnace. By the 1 870's, ferrochrome containing 30 to 40 
percent chromium was produced by using higher blast 
furnace temperatures and larger quantities of coke. With the 
development of the electric arc furnace, however, chromite 
ore can be processed to high-carbon ferrochromium 
containing 67 to 71 percent chromium. Chromite and coke 
are fed into the furnace, the ore is reduced, and the 
ferrochromium collects at the bottom of the furnace. A 
high-carbon ferrochromium suitable for low-alloy steels is 
produced. The product, however, is not suitable for 
high-chromium steels, such as stainless steel, where 
low-carbon ferrochromium is needed. Low-carbon ferrochro- 
mium is produced by smelting chromites or high-carbon 
ferrochromium in the presence of silicon. 

Development of the argon-oxygen decarburization (AOD) 
process for making stainless steel made it possible for a 
lower grade ferrochromium, known as charge chromium, to 
be marketed. In the AOD process, an adapted converter 
vessel blows out impurities with a mixture of oxygen and inert 
argon gas. 

Additional processing and transportation charges would be 
incurred in the production of ferrochromium from chromite. 
However, because ferrochromium is a refined product, it 
commands a higher price than chromite. Two ferrochromium 
products examined in this study are a low-chrome ferrochro- 
mium containing 52 percent chrome and a high-chrome 
ferrochromium containing 65 percent chrome. Over 91 
percent of the resources at the demonstrated level and 84 
percent at the identified level could be produced to a 
low-chrome ferrochromium. 

Market prices for low-chrome and high-chrome ferrochro- 
mium are about the same per pound of contained chromium; 
however, because of the higher chromium content of 
high-chrome ferrochromium, the price per metric ton is much 
greater. Prices as of December 1980 are shown below: 



Cents per pound Dollars per 
contained metric, ton 

chromium ferrochromium 



Low-chrome ferrochromium 
(50-55 percent chromium). . 
High-chrome ferrochromium 
(60-65 percent chromium). . 



45.5-47.5 
46.0-52.0 



502-576 
609-745 



For this study, the grades selected were 52 and 65 percent 
for the low-chrome and high-chrome ferrochromium pro- 
ducts, respectively. The comparative price of imports CIF the 
United States, with which the domestic ferrochrome products 
would compete, are as follows: 

Low-chrome ferrochromium 

(52 percent chromium) $522 per metric ton. 

High-chrome ferrochromium 

(65 percent chromium) $666 per metric ton. 

Recoverable ferrochromium, at both the demonstrated and 
identified levels, is illustrated in figure 6. The solid lines on 
the curve indicate low-chrome ferrochromium, and the dotted 
lines show high-chrome ferrochromium. At a current market 
price of $522 per metric ton for low-chrome ferrochromium 
and $666 for high-chrome ferrochromium, there are no 
economically recoverable domestic chromium resources. 
Recoverable quantities of the low- and high chrome products 
at various ferrochromium prices are shown on table 7. 

Annual potential availability curves for ferrochromium are 
illustrated in figure 7. High-chrome ferrochromium is shown 
with dotted lines and low-chrome with solid lines. Most 
low-chrome ferrochromium is available at a price below $800 
per metric ton, whereas all high-chrome ferrochromium 
would cost more than $800. 



400 
200 
OOO 
800 
,600 
400 
,200 
,000 
800 
600 
400 
200 





1 r ' 


! 1 1 1 1 1 1 




- 






- 


- 






- 


- 




Low-chrome ferrochromium 


- 


Demonstrated 
resources 




- 


- 






- 


- 


f 


:—" 


- 




rJ 


Identified resources 




- 






- 


- 






- 


- 


1 1 


1 1 1 — 1 1 1 


- 



2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 
TOTAL RECOVERABLE FERROCHROMIUM, thousand metric tons 

Figure 6. — Ferrochromium total resource 
availability, 1 5-percent rate of return. 



Table 7 Potential recoverable ferrochromium 

at various ferrochromium prices, thousand 
metric tons 

(January 1981 dollars) 



Ferrochromium 
price per 
metric ton 1 


Demonstrated 

Low- 
chrome 


resources 

High- 
chrome 


Identified 

Low- 
chrome 


resources 
High- 
chrome 


Less than $800 . . , 

$800-$1200 

More than $1200 . 


4,130 

760 

20 






480 


12,380 

680 

20 




4,320 

150 


Total 


4,910 


480 


13,080 


4,470 



10 



i ooo 

I.800 

1,600 

1.400 

1.200 

1.000 

800 

600 

400 

■ 200 



2,000 
1.800 
1,600 
1,400 
1,200 
1,000 
8O0- 



600 



200- 



n + 9 



n + 2 

■I 



n + 

r 



n = base year of analysis, 
preproductton begins 

• High-chrome ferrochromium 
- Low-chrome ferrochromium 



Demonstrated resources 



100 



n=bose year of anolysis, 
preproduction begins 



High-chrome ferrochromium 
Low-chrome ferrochromium 



n + 9n + 5 




Identified resources 



100 200 300 400 500 600 700 

RECOVERABLE FERROCHROMIUM, thousand metric tons 

Figure 7. — Ferrochromium annual resource 
availability, 15-percent rate of return. 



Within the past decade an increasing amount of our 
chromium imports have been in the form of ferrochrome; our 
import dependency has shifted from chromium ore to 
ferrochrome, as chromite-producing countries have built their 
own ferrochrome plants in an effort to enhance their export 
revenues. There is understandable concern over the future 
viability of our domestic ferrochrome industry, since trans- 
portation costs favor the production of ferrochrome near the 
source of the ore; and this concern is intensified by the rising 
costs of domestic labor, capital, energy, and pollution control. 
This trend could further reduce our domestic ferrochrome 
capacity, and could have a significant impact on any future 
plans for the development of domestic chromium resources. 

It should be noted that any substantial increase in the 
market price of ferrochromium would probably not be met 
with a corresponding increase in domestic ferrochromium 
capacity, since the incentive for increasing domestic 
ferrochrome capacity would probably be restrained by the 
limited life of domestic chromium production. 



CONCLUSIONS 



In most instances, metallurgical-grade chromium from 
domestic deposits would cost significantly more to produce 
(a minimum market price of $237 per metric ton of chromite) 
than the current market price ($128 to $144). Chemical- 
grade chromite production would require a market price in 
excess of S1 88 per metric ton of chromite; the current market 
price is $74 to $85. Based on current known domestic 
resources, production would be relatively small and of short 
duration. At the demonstrated resource level, an estimated 
4.6 million metric tons of Cr 2 3 in chromite concentrates 
could be recovered over a production period of 48 years. 
Recoverable tonnage increases to 1 5.6 million metric tons at 
the identified resource level. Most of the chromite would be 



suitable for use by the chemical and/or metallurgical 
industries. 

Analyses of the potential availability of the ferrochromium 
produced from domestic concentrates, and costs of process- 
ing, transporting, and producing ferrochromium from chro- 
mite concentrate resulted in two products: low-chrome and 
high-chrome ferrochromium. Over 91 percent of the re- 
sources at the demonstrated level and 84 percent at the 
identified level could be produced to a low-chrome ferrochro- 
mium. 

At the current market prices for low-chrome ($522) and 
high-chrome ferrochromium ($666), there are no domestic 
chromium resources that could be economically produced. 



11 



BIBLIOGRAPHY 



1. Arthur D. Little, Inc. Economic Impact of Environmental 
Regulations on the United States Copper Industry. Rept. to the U.S. 
Environmental Protection Agency, January 1978, contract 68-01-2842; 
available from the American Mining Congress, Washington, D.C. 

2. Bennett, H.J., J.G. Thompson, H.J. Quiring, and J.E. Toland. 
Financial Evaluation of Mineral Deposits Using Sensitivity and 
Probabilistic Analysis Methods. BuMines IC 8495, 1970, 82 pp. 

3. Charles River Associates. Chromite: Market Analysis and 
Econometric Model. Prepared for U.S. General Services Administra- 
tion, Cambridge, Mass., June 1973, p. 6. 

4. Clement, G.K., Jr., R.L. Miller, P.A. Seibert, L. Avery, and H. 
Bennett. Capital and Operating Cost Estimating System Manual for 
Mining and Beneficiation of Metallic and Nonmetallic Minerals Except 
Fossil Fuels in the United States and Canada. BuMines Special Pub., 
1980, 149 pp. Also available as: STRAAM Engineers, Inc. Capital and 
Operating Cost Estimating System Handbook — Mining and Beneficia- 
tion of Metallic and Nonmetallic Minerals Except Fossil Fuels in the 
United States and Canada. Submitted to the Bureau of Mines under 
contract JO255026, 1 977, 374 pp. 

5. Daellenbach, C.B., R.E. Siemes, and D.E. Kirby. Nickel, Cobalt, 
and Chromium From Domestic Laterites. Sec. in Research 1979. 
BuMines Special Pub., p. 44. 



6. Davidoff, R.L. Supply Analysis Model (SAM): A Minerals 
Availability System Methodology. BuMines IC 8820, 1979, 45 pp. 

7. Dickson, T. Chromite, Southern Africa Holds Sway. Ind. Miner. 
(London), v. 150, March 1980, p. 56. 

8. Harris, D.L. Chemical Upgrading of Stillwater Chromite. Trans. 
SME/AIME, v. 229, No. 3, September 1964, pp. 267-281. 

9. Kusik, C.L., H.V. Makar, and M.R. Mounier. Availability of Critical 
Scrap Metals Containing Chromium in the United States. Wrought 
Stainless Steels and Heat-Resisting Alloys. BuMines IC 8822, 1980, 51 
pp. 

10. National Materials Advisory Board. Contingency Plans for 
Chromium Utilization. National Academy of Sciences, Washington, 
D.C, NMAB-335, 1978, p. 347. 

11. Stermole F.J. Economic Evaluation and Investment Decision 
Methods. Investment Evaluations Corp., Golden, Colo., 1974, 443 pp. 

12. U.S. Bureau of Mines. Highlights, Aug. 27, 1979, p. 7. 

13. Mineral Facts and Problems. Chapter on Chromium, 

1976 and 1980. 

14. U.S. Geological Survey and U.S. Bureau of Mines. Principles of 
a Resource/Reserve Classification for Minerals. U.S. Geol. Survey 
Circ. 831, 1980, 5 pp. 



12 

APPENDIX A 

Table A-1. — Ownership and control of domestic chromium properties 

Property name Domain Type of mineral holding Owner Percent of 
ownership 

Claim Point . . . . . Federal Patented Union Carbide 50 

State lease Joe Manga 50 

Red Blutt Bay National forest Minerals only NA NA 

Red Mountain State Patented R. S. Richards 10 

Union Carbide 84 

Kenai Chrome Co 6 

California: 

Bar Rick Mine Private Private lease Collins H. McClendon 50 

Inspiration Development Co 50 

Gasquet Laterite National forest Located claim California Nickel Corp 1 00 

Little Rattlesnake do do Del Norte Mining Co 100 

Lower Elk Camp do do California Nickel Corp 100 

McGuffy Creek do do Elmer Weeks 100 

North Elder Creek do Unknown California State 100 

Pilliken Mine Private Patented Red Line Transfer Co 100 

Located claim 

Pine Flat Mountain National forest do Hanna Mining Co 100 

Red Mountain Mixed do do 1 00 

Private lease 

Fee ownership 

Seiad Creek Emma Bell National Forest Located claim U.S. Chrome 100 

r^„r„;,- Patented 

Georgia: 

Louise Chromite Private Fee ownership Numerous misc 100 

Maryland: 

Cherry Hill Private Fee ownership H. Pleasant, Jr 100 

Dolfield do Unknown F. A. Dolfield 100 

Gore Placer do Fee ownership Paul D. Gore 100 

Private lease 

" State lease 

Lutz Chromite do Unknown A. Lutz 100 

Marshall do Fee ownership' E. T. Marshall 100 

Old Triplett State Unknown NA NA 

Riley Sand Private do H. M. Riley 100 

Triplett State do NA NA 

West Placer Private do Mrs. Paul West 1 00 

Montana: 

Benbow Mine National forest Patented Anaconda 100 

Gish Mine do do Monte Vista Co 100 

Mouat Mine do do Anaconda • 100 

North Carolina: 

Holcome Private Unknown NA NA 

Leichester do Fee ownership NA NA 

Minerals only 

Morgan Hill do Unknown NA 



NA 



Oregon: 

Eight Dollar Mountain Mixed Located claim Numerous misc 1 00 

Private lease 

Red Flat do Located claim Red Flats Nickel 59 

Big Basin Nickel 13 

Hanna Mining Co 28 

Rough and Ready do do Inspiration Development Co 95 

Private lease Walt Freeman 5 

Southwest Oregon Beach Sands. Private Fee ownership NA NA 

Other 

Woodcock Mixed Located claim Hanna Mining Co 80 

Inspiration Development Co 15 

California Nickel Corp 5 

Pennsylvania: 

A. T. Reynolds Private Unknown .\ NA NA 

Kirk Sand do Fee ownership Mrs. E. Kirk 100 

Slaymaker do do S. R. Slaymaker 100 

Private lease 

Minerals only 

Renshaw Placer do Fee ownership NA NA 

Minerals only 

Private lease 

Wet Pit Slaymaker do Unknown Slaymaker Lock Co NA 

Wyoming: 

Casper Mountain Mixed Patented Consolidated Mining Co NA 

Fee ownership Wyoming Baptist Convention NA 

City of Casper NA 



NA Not available. 



APPENDIX B.— MINING METHODS 



13 



The underground shrinkage-stoping mining method has 
been proposed for the Mouat, Benbow, and Gish deposits in 
the Stillwater Complex. Included in the development plan are 
rehabilitation of old mine workings and development of the 
main haulage drifts and service shafts at Mouat and Benbow, 
as well as preproduction development of the stopes and ore 
passes. At all three properties, the broken ore would be 
transported underground by rail to a centrally located mill 
near the portal at the Mouat Mine. 

The deposits in Georgia, Maryland, North Carolina, 
Oregon, and Pennsylvania are small placer and residual 
deposits that could be surface mined with front-end loaders 
and trucks, and beneficiated by centrally located or portable 
concentrating units. 

The Bar Rick, McGuffy Creek, North Elder Creek, Pilliken, 
and Seiad Creek deposits of northern California are past 
producers of chromite. 

Access to the Bar Rick deposit is proposed by driving a 
main haulage level adit, with the mill near the portal. 
Preproduction would include driving this level, raising a 
service and ventilation shaft, and preparing other stope and 
intermediate levels for the mining that occurs above the main 
level. Haulage would be by LHD units in the upper workings, 
and by trolley locomotive on the main level. 

The old Emma Bell and Seiad Creek mine workings lie on 
slopes of ridges above the east and west forks of Seiad 
Creek. Because the ore zone can be observed in a 
discontinuous outcrop, open pit mining using front-end 
loaders and trucks is proposed; little overburden removal or 
clearing is necessary. 

At the Pilliken deposit, over 1 1 separate ore mineraliza- 
tions have been identified, and a surface mine operation from 
three pits has been proposed. Mining would be by power 
shovels and trucks. Five separate pits are proposed to mine 
the McGuffy Creek area, utilizing front-end loaders and 
trucks for both ore and waste removal. 

Open pit mining is proposed in the North Elder Creek area. 
Removing overburden would be necessary, since the 
deposits are covered by landslide and slope-wash debris. 



Three pits are proposed; mining would be by front-end 
loaders and trucks. 

The Red Bluff Bay deposit in Alaska is composed of 
several mineralized areas. The chromite occurs in small 
lenses, thin layers, and disseminated grains in ultramafic 
rocks. Glaciation has removed much of the overburden. 
Mining from this deposit area would be by front-end loaders 
and trucks from five open pits. 

The Claim Point deposit in Alaska also is composed of 
numerous individual chromite occurrences. The deposits are 
near the surface, and open pit mining using front-end loaders 
and trucks is also proposed for this area. 

The Red Mountain, Alaska, deposit is composed of 
numerous small ore bodies, some of which have produced 
chromite. The chromite occurs in banded layers within the 
ultramafic. Proposed is a small underground mining opera- 
tion using shrinkage stoping, with transportation by rubber- 
tired transloaders. 

Mining the Casper Mountain deposit, Wyoming, would be 
by open pit methods. The chromite occurs as disseminated 
grains throughout a schist. Mining of ore and waste rock 
would include percussion drilling, blasting, front-end loading, 
and truck hauling. The relatively thin overburden would be 
removed by self-loading scrapers. 

The California-Oregon nickeliferous laterites are of signi- 
ficant lateral extent, limited depth, and low grade. The 
laterites could be mined by surface methods. The overbur- 
den would be ripped and bulldozed, and the lateritic soil 
extracted by front-end loaders and hauled by trucks to a 
central screening area. Large boulders would be separated 
from the weathered soil and discarded. The laterite soil would 
then be chemically treated to separate cobalt, nickel, and 
chromite. One of the proposed chemical processes is being 
developed at the Bureau of Mines Albany (Oreg.) Research 
Center. To evaluate the Bureau's technology, a pilot plant 
was recently built to process domestic laterite samples at a 
rate of 4.5 to 7 metric tons per day. Since this process has 
not been tested on a commercial scale, the laterite deposit 
were not included in the availability analysis in this study. 



APPENDIX C— RESEARCH AND DEVELOPMENT 



Research has been conducted on chemical concentration 
of chromite ores; however, no commercial operations have 
occurred. Processes researched include selective reduction 
of iron from chromite, partial reduction and acid leaching of 
iron in a chromium ore, alteration of chromite structure 
followed by gravity concentration, hydrogen-reduction of 
chromium from chromium chloride, production of calcium 
chromite and chromic oxide, and acid decomposition of 
chromites. 

A process that would recover cobalt and nickel from 
domestic laterites has been investigated at the Bureau of 
Mines Albany (Oreg.) Research Center. This process entails 
reducing of oxides in the laterite, ammoniacal-ammonium 
sulfate leaching, nickel and cobalt solvent extraction, and 
electrowinning. Chromite in the laterite remains insoluble in 
the leaching process, and normally reports to tails; however, 
this residue can be beneficiated to recover chromite 
concentrates containing an average 27.2-percent-Cr 2 3 
content (leach residue contains only 2.3 percent chromium). 
The residue would first be fed to a high-shear dispersion mill 
and separated by screening at 65 mesh and by hydroclone 
separation. The oversize is discarded, and the undersize is 
sent to low-intensity magnetic separation where iron oxide is 
separated and discarded. The nonmagnetic chromites are 



then classified and concentrated, principally by tabling. 
Slime-table middlings are acid scrambled and upgraded with 
a high-intensity wet-magnetic process. Overall recovery is 
less than 50 percent of the chromium contained in the leach 
residue. The concentrate produced is of a lower grade than 
current chromite concentrates. Studies are being conducted 
on possible concentrate use. 

In 1977, the Bureau of Mines Salt Lake City (Utah) 
Research Center initiated a study into the beneficiation of 
low-grade chromite ores from the Stillwater Complex. These 
studies investigated gravity concentration, flotation, heavy 
media, and magnetic separation as a means of making an 
upgraded concentrate suitable for the ferrochrome market. 
Test results from Albany Research Center indicated that an 
acceptable grade of ferrochromium can be produced from a 
gravity concentrate by submerged arc melting. A combined 
spiral and table-separation technique was successful in 
upgrading ore from 19 to 41 percent Cr 2 3 with an overall 
92-percent recovery. Magnetic separation of the gravity 
concentrate, which will increase the Cr:Fe ratio from 1.7 to 
1.9, has been more recently investigated in a 100-pound-per- 
hour process investigation unit, and achieved a 43-percent- 
Cr 2 3 concentrate with a recovery of 87 to 91 percent. 



14 



APPENDIX D.— COST ANALYSIS OF AN OPEN PIT MINING AND MILLING OPERATION 



This appendix contains a brief example of a hypothetical 
1 ,900-metric-ton-per-day open pit mining and milling opera- 
tion, in order to illustrate the costing and economic evaluation 
categories used in this study. 

For each deposit, an engineering and cost estimate was 
made to assess the economic feasibility of recovering 
chromium from that deposit. A mine and mill development 
plan was proposed based on the reserve or resource, 
geology, geometry, and mineralogy of the deposit, and 
standard industry technologies that were applicable. The 
various components of the development were then costed, 
including exploration, acquisition, mine preproduction de- 
velopment, mine plant and equipment, mill plant and 
equipment, mine and mill operating costs, and any proposed 
infrastructure costs. These costs were based upon proposed 
equipment lists, scaling costs from similar operations, or by 
other cost estimating procedures. One such estimating 
procedure is the Bureau of Mines Cost Estimating System 
(CES) (70), which enables an engineer to cost an operation 
based on unit processes and estimated engineering param- 
eters. A summary of the capital cost requirements for a 
hypothetical chromium property assumed to open pit mine 
1 .900 metric tons per day of ore and 1 ,000 metric tons per 
day of waste, appears in table D-1 ; the operating costs are 
illustrated in table D-2. 

Table D-1. — Estimated capital requirements for 

a 1 ,900-metric-ton-per-day open pit mining and 

milling operation 



Cost 



Mine lease-option cost, property acquisition $200,000 

Exploration and engineering study 300,000 

Preproduction stripping: 11,300,000 tons 

at SO. 20 per ton 755,000 

Mine plant and buildings 834,000 

Mine pit equipment 2,167,000 

Mill plant and equipment 1 2,574,000 

Working capital 1 0,773,000 

Total capital required 27,603,000 



After this cost estimation has been completed, an 
economic evaluation is made in order to determine the 
incentive price of chromium necessary to cover these 
estimated costs, with a desired rate of return on the capital 
investment. For this example, the 15-percent DCFROR 
incentive price required to produce ferrochrome concentrate 
was estimated at $1,167 per metric ton, in January 1981 
dollars. Table D-3 contains data used in the evaluation; table 
D-4 contains the cumulative financial values derived for the 
economic evaluation. 



Table D-3. — Deposit operating data required for 
economic evaluation of the 1 ,900-metric-ton-per- 
day open pit mining and milling operation 

Category description 
and units 



Exploration dollars 

Land acquisition do , . 

Mining preparation do . . 

Do do . . 

Mine plant do. . 

Mine equipment do . . 

Mill plant 

and equipment do . . 

Working capital do . . 

Mine operating cost, 

per ton ore do . . 

Mill operating cost, 

per ton ore do . . 

Ore mined per year tons , . 

Chromium: 

Feed grade pet Cr . . 

Mill recovery pet . . 

Concentrate grade pet Cr. . 

Smelter recovery pet . . 

Smelter grade pet Cr. . 

Smelter operating cost, 

per ton chromite 

concentrate dollars 

Transportation to market, 
per ton ferrochrome do . 



Year of 


occurrence 


Annual 


Begin 


End 


category value 


. 1981 
1981 
1981 
1983 


1981 
1981 
1982 
1983 


300,000 

200,000 

356,200 

42,300 


1981 
1981 


1983 
1983 


278,100 
722,300 


1981 
1984 


1983 
1984 


4,191,300 
10,773,000 


1984 


1993 


5.32 


1984 
1984 


1993 
1993 


4.13 
570,000 


1984 
1984 
1984 
1984 
1984 


1993 
1993 
1993 
1993 
1993 


3.4 
85 
28.4 
90 
65 


> 1984 


1993 


170 


1984 


1993 


200 



Table D-2. — Estimated operating costs for a 

1 ,900-metric-ton-per-day open pit mining and 

milling operation 

(Dollars per metric ton of ore) 
Operation Labor Equipment Material Total 

Surface Mining: 

Production development $0.68 $0.45 $0.12 $1 .25 

Mining of ore 1 .70 1 .22 .35 3.27 

Restoration during 

production <.01 <.01 .04 04 

General operations 31 .02 .06 .39 

General administrative 

expense .33 £1 .03 .37 

Total mining operating 
costs 3.02 1.70 .60 5.32 

Beneficiation: 

Crushing $0.31 $0.17 $0.07 $0.55 

Grinding 41 .44 .20 1 .05 

Concentrating 78 .08 .34 1 .20 

Waste and tailings disposal 12 .02 .06 .20 

General (water supply, etc.) .34 .13 14 .61 

General administrative 

expense .47 01 04 .52 

Total beneficiation 
operating costs 2.43 .85 .85 4.13 



Table D-4. — Cumulative values derived for the 
economic evaluation of the 1 ,900-metric-ton-per- 
day open pit mining and milling operation 



Value 

Revenues 1 $266,123,000 

Royalties 

Total depreciation 15.575,100 

Depletion used 26,254,100 

Investment tax credit 1 ,557,500 

Property taxes 798,900 

Severance taxes 

State income taxes 2,218,700 

Federal income taxes 11,161,800 

Cash flow 37,025,400 



1 The nickel price calculated to produce these revenues at a 15-percent rate 
of return of and on capital was $1,166,758 per metric ton of ferrochrome. 



U.S. GOVERNMENT PRINTING OFFICE : 1982 - 387-184 



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